Downtown Grocery Coming To Detroit Lofts?

[sgrizzle]

Take QuikTrip for instance, the (577) stores have up to 20 pumps and turn around 7.5 billion in Fuel sales equaling about 750 million in gross profit.  These same stores sell about 500 million in grocery/fountan/and beer equaling only $10 million in gross profit.  Now, if you subtract the overhead associated with the food sales vs the fuel sales, it's not even a competition.

$750M + $500M = $10M Wha?

7.5B is the company's total revenues for the year from any financial source I can find.

Even if that was all in fuel sales at 9c/gallon profit = about $193M (of which the majority of maintenance and construction costs at a QT goes to the fuel systems)

Overhead on the food stuffs is fairly low. Most vendors stock their own supplies and when you are paying $1 for your fountain quart, QT is pocketing roughly 90% of that.

[Cats Cats Cats]

Yes, it actually is, but thanks for playing.

Now I understand why you are a Republican.  The manager Bob is making $3 profit a sandwich.  Manager Gaspar is having a hard time over in the frozen food section because he can't get anybody to fix the freezers right.  Every damn month!.  Luckily Gaspar does the books.  Bob sold 1000 sandwiches making the company $3,000 profit on $1,000 in food costs.  Gaspar lost $2,000 in ruined products.  Gaspar determines that the sandwich counter sales are part of the frozen food section.  Now the sandwich shop just lost the company -$1000 in food costs and Gaspars section made $1000 profit ($3k-$2k lost).  This goes on for a few months and so they fire Bob and close their money losing sandwich shop.  Now the store is making a $3k a month less. 

Doesn't matter how you do the books.  The total for the store will be the same profit or loss, it is what it is.  But you only replace the sandwich shop if you can make more money using the space for something else.  You also don't use costs unrelated to the sandwich shop to determine if you should close that portion of the store and reopen it as more freezer section.

[Cats Cats Cats]

$750M + $500M = $10M Wha?

7.5B is the company's total revenues for the year from any financial source I can find.

Even if that was all in fuel sales at 9c/gallon profit = about $193M (of which the majority of maintenance and construction costs at a QT goes to the fuel systems)

Overhead on the food stuffs is fairly low. Most vendors stock their own supplies and when you are paying $1 for your fountain quart, QT is pocketing roughly 90% of that.

He is saying they only make $10 million profit the food and 750 million from the gas.

[Conan71]

1. One barrel of oil = only about 19-20 gallons of gas.
2. You are quoting prices for "oil futures" not the actual cost of oil

As well as other distillates and by-products which are used in all sorts of finished goods. 

QT most definitely operates on a cost/sq ft. model and they know pretty much daily how each store is doing. 

[Cats Cats Cats]

QuikTrip drew high regard from its competition. In 1998 QuikTrip stores averaged $2 million in merchandise sales and three million gallons of gasoline

Read more: http://www.answers.com/topic/quiktrip-corporation#ixzz1Iquvs7W0

Now gas is 3x as much as it was in 1998 so that makes out to probably 9 million vs 2.5 million with inflation+more food items.

[Gaspar]

$750M + $500M = $10M Wha?

7.5B is the company's total revenues for the year from any financial source I can find.

Even if that was all in fuel sales at 9c/gallon profit = about $193M (of which the majority of maintenance and construction costs at a QT goes to the fuel systems)

Overhead on the food stuffs is fairly low. Most vendors stock their own supplies and when you are paying $1 for your fountain quart, QT is pocketing roughly 90% of that.

They've fluctuated between 7 and 8 Bil over the last few years.  I believe they are over that today, but the economy may have put them back a bit. 

They make between .15 and .25 a gallon now because they own the distribution channel.  They used to only charge 9.5 cents back in the late 90's  that's what really shut out their competition.  You're right in that I did my math on the gross wrong.  They're at around 650 Million gross profit on fuel.  The grocery estimate is still accurate enough for the women I date.

They sell around 2.5 to 3 billion gallons of gas every year, making up 1.7% of all of the gas sold in the United States.

Everything in their model is designed for customer satisfaction so that you will buy gas there.  Rumor is now that they will soon be upgrading their bakery with fresh artisan breads delivered daily to every store.

[sgrizzle]

QuikTrip drew high regard from its competition. In 1998 QuikTrip stores averaged $2 million in merchandise sales and three million gallons of gasoline

Read more: http://www.answers.com/topic/quiktrip-corporation#ixzz1Iquvs7W0

Now gas is 3x as much as it was in 1998 so that makes out to probably 9 million vs 2.5 million with inflation+more food items.

That can't be right because Gaspar says they make a lower markup on Gas than food and that would mean the majority of their profit came inside the store.

But.. but...

Jeff Lenard, spokesman for the National Association of Convenience Stores, estimates that gasoline accounts for 70 percent of a typical station's revenues, but only 30 percent of its profits.

[Conan71]

Along the lines of what comes out of a 42 gallon barrel of oil: 44.2 gallons of refined products

WHAT A BARREL OF CRUDE OIL MAKES
 
  Product Gallons per barrel 
  gasoline 19.5
  distillate fuel oil
(Includes both home heating oil and diesel fuel) 9.2
  kerosene-type jet fuel  4.1
  residual fuel oil
(Heavy oils used as fuels in industry, marine transportation and for electric  power generation) 2.3
  liquefied refinery gasses 1.9
  still gas 1.9
  coke 1.8
  asphalt and road oil 1.3
  petrochemical feedstocks 1.2
  lubricants 0.5
  kerosene 0.2
  other 0.3

Figures are based on 1995 average yields for U.S. refineries. One barrel contains 42 gallons of crude oil. The total volume of products made is 2.2 gallons greater than the original 42 gallons of crude oil. This represents "processing gain."

http://www.txoga.org/articles/308/1/WHAT-A-BARREL-OF-CRUDE-OIL-MAKES
 

[ZYX]

What was I thinking? It was late, and I wasn't thinking at all. But, I was just trying to point out that oil and gas are expensive, and that last I heard, many convenience stores would go out of business if they simply sold gas. I understand that times have changed since then, but to the best of my knowledge, they do make money off of what's inside.

[Conan71]

What is somewhat scary is QT seems to control the market gas prices in the Tulsa area.  You will be hard-pressed to find such level pricing anywhere else.  In OKC where no one dominates the market, you will see as much as .30 difference from one station to another as you drive around and there's even two On Cue Expresses (Closest thing OKC has to QT) within two miles of each other which rarely have the same fuel prices.

In Tulsa you know what fuel will be once you see a QT sign. If it's $3.39 there, it's going to be $3.49 at any Shell or Sinclair.  That's something you can count on throughout the city with the exception of the one or two full service stations still around.

[JoeMommaBlake]

Gaspar,

The project in question is really not a grocery store. With all due respect, those metrics will not apply.

The perishable products of which you speak don't "perish" at the market They get turned into lunch for the restaurant customers before their perishable dates hit. When the apples start getting old, for example, they become an apple pie.

This place has a food line with a salad bar. It will be hot, fresh, chef-prepared food. That will be the driving force. Also, there will be coffee and baked items.

As for the market, there will be much more dry pasta, cereal, and canned and frozen food than than there will food with a short shelf life. The produce will be fresh, but as I mentioned, it will be easy to turn that into food for the food line as it gets near the end of its date, same thing with baked goods, deli items, and rotisserie chickens.

There is a method to this madness.

[Hoss]

What is somewhat scary is QT seems to control the market gas prices in the Tulsa area.  You will be hard-pressed to find such level pricing anywhere else.  In OKC where no one dominates the market, you will see as much as .30 difference from one station to another as you drive around and there's even two On Cue Expresses (Closest thing OKC has to QT) within two miles of each other which rarely have the same fuel prices.

In Tulsa you know what fuel will be once you see a QT sign. If it's $3.39 there, it's going to be $3.49 at any Shell or Sinclair.  That's something you can count on throughout the city with the exception of the one or two full service stations still around.

Actually, Wal Mart (Murphy's USA) has been undercutting QT a bit (at least for a day or two) when it comes to gas prices.  If QT goes up say, mid-afternoon, their typical dime increase, the Murphy's usually won't raise theirs until mid-morning the next day.  Gives me time to get there before they do.  As I drove home I noticed they were 3.43 at the one at Admiral/Memorial.  QT is still 3.45

[Conan71]

Fortunately, since I bought my new steed, I don't worry near as much about gas prices as I did with the truck.  But I do have to admit to sticker shock each time I go since it's a bit longer between visits to the pump with the Sonata.  My poor truck had a hard time passing gas stations without wanting a drink.

I wonder how Sauerkraut's old beater is making out with the high gas prices...

[ZYX]

So Blake, any idea how much items will cost at this store? Pretty standard stuff like box of cereal, gallon of milk, carton of eggs, etc.

[YoungTulsan]

I always look at people like they have a foot growing out of their forehead when they tell me about gas being 1 or 2 cents cheaper somewhere.

I'm a weirdo though, I don't buy gas at QT.  I pay more for ethanol free gas at an unmanned station with my debit card.  In my experience, the slight increase in gas mileage more than makes up for the price difference (actually making it cheaper)- but that usually starts another debate.   Thing is, I still visit QT almost daily for various items.  I am 100% confident they are still making money off of me.

If this place is going to offer quick & ready food, it will succeed or fail based on how easy it is to get in and out of the place.